Copper prices hovered near record highs on Tuesday, with the benchmark London Metal Exchange contract trading just below the $14,000-per-tonne mark, as supply disruptions and renewed demand optimism continued to underpin the rally in industrial metals.
The three-month copper contract was up marginally at $13,962 a tonne by late morning trading on the LME, after briefly touching its highest intraday level since January, when prices surged above $14,500 a tonne.
The latest leg of the rally has been driven by a combination of tightening global supply, geopolitical risks in the Middle East, and a rebound in Chinese demand.
The metal has also become increasingly correlated with gains in US technology stocks, amplifying investor interest in commodities tied to electrification and AI-driven infrastructure growth.
Supply concerns intensified after PT Freeport Indonesia slashed its 2026 copper production target to 700 million pounds from an earlier goal of 1 billion pounds. The downgrade follows delays in restoring operations at the Grasberg mine after a deadly mudslide in September 2025 halted extraction activity. Full-scale operations are now expected only by early 2028.
The disruptions extend beyond Indonesia. Copper producers reliant on sulfuric acid — used in extracting metal from oxide ores and accounting for roughly 20% of global output — are facing shortages following disruptions to sulfur shipments through the Strait of Hormuz.
Major African producers such as the Democratic Republic of Congo and Zambia have already been affected, while Chile is also facing tighter availability amid Chinese export restrictions on the chemical.
Despite the mounting supply risks, copper's rally has shown signs of losing momentum. Since late February, when the first strikes on Iran rattled energy markets, prices have risen only modestly. Analysts say weakening global demand expectations are offsetting tighter supply conditions.
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The International Copper Study Group has revised down its forecast for global mine production growth in 2026 to 1.6% from 2.3%, while simultaneously projecting a surplus of 96,000 tonnes in the refined copper market this year.
It also cut its demand growth estimate to 1.6%, citing the deteriorating economic outlook amid geopolitical tensions.
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